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BookingAlpha Option Trading Advisory

Saturday, July 23, 2016

Weekend Portfolio Analysis (July 23, 2016)

You will see me lose money on a Credit Call spread.
You will see me lose on an Iron Condor.
From time to time my bias will be totally erratic,
but you will never, ever, ever ever,
see me install Pokémon Go in my device.

I had to start with this little reflection, because, the level of idiocy reached by our species is truly alarming. I live near the beach, and folks, people don't come here to get a tan or watch hot girls in bikini anymore. It's all about the goddamned Pokémon. Even 25 year old folks. But,...if you can't defeat your enemy, you'd better join him. So, this is gonna be a short article. I feel this incredible urge to go downstairs and find Pokémon as the new strategy to meet hot beautiful young girls.

Recent Trading Activity

- Closed August 1890/1900 Credit Put spread for a $1,060 gain on Tuesday

Market Conditions
(Click on image to enlarge)
Stochastics: 87 (overbought)
McClellan: +50 (neutral)
Stocks above their 20 DMA: 80% (overbought)

No man's land. All three indicators are lower than last week. Yet price is a little higher. There has been a slight pause already. I need it to be more than that, but at least the super unstoppable train slowed down. I think the upside is limited and slow from here without some sort of correction first. But well, I'm just following my rules and I've been wrong in the past. The important thing is to control risk and respect price.

With 8 weeks until September expiration it was time to sell an Iron Condor, but, having three Credit Call spreads on already, I am just wiling to add a Credit Put side to the 2260/2270 September position and not increase upside risk at this point.

Current Portfolio

September SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

October SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

August  SPX 2210/2215 Credit Call Spread
$1,000 credit. Some more pressure now at 23 deltas. It's half the typical size, so, I'm not too concerned. Still, I may need to defend it this week if I don't see immediate relief.

September SPX 2260/2270 Credit Call Spread 
$1,800 credit. Safe at just 12 deltas.

October SPX 2300/2310 Credit Call spread
$1,900 credit. Just 11 deltas. No concerns.

Action Plan for the Week

- I'll defend the August 2210/2215 CCS by purchasing 2 of the 2215 August Calls and selling a few of the 2050/2060 Credit Put spreads to collect some more credit. Don't want to roll this one out to the next month as there is already exposure in both September and October.

- If we correct 30 or 40 SPX points, I'll gladly take 50% of max gain on the SEP 2260/2270 and the OCT 2300/2310. I'd also gladly close the AUG 2210/2215 for breakeven at this point.

- Finally, being in no man's land I will sell a September Credit Put spread to complete the September Iron Condor. Right now it would be around the 1990 Puts.

The LT Trend Sniper went short EURUSD at 1.10168 this week. The currency pair is currently changing hands for 1.09714. There is a small profit for now and Stop Loss has been moved down by a quarter, sitting now at 1.11344.

Economic Calendar

Tuesday: US Consumer Confidence. New Home Sales.
Wednesday: Core Durable Goods Orders, Pending Home Sales, FOMC Statement, US Crude Oil Inventories.
Thursday: Goods Trade Balance.
Friday: Europe CPI and GDP. US GDP.

Options Trading results: Up +1.12% YTD vs S&P up +6.41%. Portfolio 55% invested, 45% cash.
Forex Trading results: Down 3.03% for the year. Short EURUSD at the moment.

Good luck this week my friends!

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